PENANG, Malaysia — How does he do it? How does Prime Minister Najib Razak of Malaysia stay in power despite allegations that he embezzled $1 billion from a sovereign wealth fund?

Corruption is nothing new here, but the scale and implications of the 1Malaysia Development Berhad (1MDB) affair are staggering. It may be the world’s largest money-laundering scandal involving a sitting head of government. The case is being investigated by authorities in at least six foreign states, including the U.S. Justice Department.

Yet there’s been no mutiny within Mr. Najib’s party, no vote of censure in Parliament, no mass protests. In both 2015 and 2016, tens of thousands of supporters of Bersih, an electoral-reform movement, took to the streets calling for Mr. Najib’s resignation. But the demonstrations don’t seem to have loosened his grip on his party, the United Malays National Organization, nor UMNO’s grip on Malaysia: UMNO has been governing the country in coalition governments for six decades.

Mahathir Mohamad, a former prime minister and former mentor of Mr. Najib who recently left UMNO, blames the political stagnation on personal patronage — or what he calls “animal feed.” Others blame it on disarray within the opposition, an uneasy assemblage of parties representing different ethnic and religious interests.Continue reading the main story

But both explanations place too much emphasis on agency among the elites and too little on structural causes.

Mr. Najib remains in power because Malaysia has become an electoral one-party state and because UMNO has captured the Muslim-Malay majority by peddling communalism under the guise of promoting equality. The opposition has yet to find an alternative model on which to build a sustainable coalition for change.

In 1969, after UMNO suffered an unprecedented electoral setback, Muslim Malays’ longstanding grievances about their economic marginalization, a byproduct of British colonialism, devolved into widespread riots between the Malay majority and the Chinese minority. Two years of emergency rule followed.

Abdul Razak Hussein, the first prime minister after the riots (and Mr. Najib’s father), approached multiparty democracy with great cynicism. He co-opted opposition groups into the governing coalition. He permanently abolished local elections, which had previously put opposition parties in charge of municipalities and given them standing to challenge the federal government’s authority. And his government tightened the sedition law to ban discussion of sensitive communal issues.

Most important, Mr. Razak introduced the New Economic Policy, a nativist plan to restructure the economy, then dominated by local ethnic Chinese and foreign capital. Muslim Malays and indigenous peoples of Borneo, together known as bumiputera, were given preferential access to education, employment, equity and homeownership. These groups soon came to dominate the fast-expanding bureaucracy and state enterprises.

The policy was a masterful move by UMNO to lock in support from Muslim-Malay voters, as well as fend off competition from the Islamist party Pas.

The system was reinforced under Mr. Mahathir’s rule, from 1981 to 2003. His government substantially privatized the economy, producing a new bumiputera capitalist class and more patronage networks. Mr. Mahathir tried to enhance UMNO’s legitimacy among Malays while further sidelining Pas with so-called Islamization policies — starting halal food certification, promoting Islamic courts and offering Islamic banking. He also sent political opponents to jail, shut down newspapers that challenged him and concentrated power in the prime minister’s office, weakening the cabinet, Parliament and the courts.

The combination of communalism and authoritarianism that both Mr. Razak and Mr. Mahathir embedded into the system over the years helps explain Mr. Najib’s resilience today.

In fact, Mr. Najib only survived the last general election in 2013 thanks to years of gerrymandering and the skewed allocation of seats in the national legislature. That year the opposition coalition Pakatan Rakyat secured only 40 percent of seats in Parliament despite winning 51 percent of the popular vote.

Dissenting voices have been increasingly harassed. In addition to the opposition leader Anwar Ibrahim, who is in jail on what many people believe are trumped-up sodomy charges, at least 18 opposition lawmakers have been investigated for or charged with sedition and other offenses since 2013.

Meanwhile, the affirmative action programs have stalled. Although they greatly reduced absolute poverty among Malays, they have done too little to raise their competitiveness. For example, Malays are overrepresented among unemployed youth with university degrees. Yet UMNO has deftly managed to exploit the policy’s waning effectiveness and even the prospect of its demise.

Malaysia’s first-past-the-post election system and the great concentration of power in the prime minister’s office mean that a change of the guard could happen suddenly and have sweeping effects. Playing on Muslim Malays’ growing fear that their dominance would be threatened if UMNO lost power and the bumiputera preferences were terminated, the party has doubled down on communal politics over the past decade.

Since the strong showing of opposition parties in the 2008 general election, ethno-religious controversies — over how women should dress, over who can say “Allah”, drink alcohol or touch dogs — have multiplied and intensified. UMNO routinely accuses opposition parties of serving Chinese or Christian interests to the detriment of Malays. When Mr. Mahathir left UMNO last year, a party leader accused him of being a “puppet” of the secularist and predominantly ethnic-Chinese Democratic Action Party (DAP).

The once-formidable opposition coalition Pakatan Rakyat — consisting of Mr. Anwar’s centrist party, Pas and DAP — fell apart in 2015, largely because of disagreement over Pas’s proposal to harden Shariah punishments in some states. UMNO is now backing a bill Pas submitted to Parliament that would pave the way for such penalties. This rapprochement is a shrewd political move — a signal by UMNO that it is trying to preserve Malay-Muslim unity by strengthening the place of Islam in Malaysian politics.

What glues many Malays to UMNO isn’t just personal patronage, as Mr. Mahathir claims, but also, and much more so, communal patronage, reinforced by the system’s authoritarian features. UMNO’s affirmative action policies may have reached a dead-end, but even if the opposition hopes to transcend Malaysia’s ethnic politics, it simply cannot do so right now. It has few options ahead of the next general election, which is expected to take place by August 2018.

To win over communalist Malay voters, some people in the opposition want to woo Pas back. But that would mean agreeing to Pas’s Shariah project, which is what ripped the opposition apart in 2015 and remains anathema to many non-Muslims (and some Muslims, too).

Others, like Mr. Mahathir and his supporters, seem to be on a personal crusade against Mr. Najib and tend to downplay the system’s structural flaws. Not admitting his part in creating those problems may be a way for Mr. Mahathir to reassure Malay communalists — he isn’t kowtowing to the Chinese; the bumiputera preferences will remain — but it is already alienating some minorities and reformists. In any event, only bold institutional reforms could correct the system’s authoritarian and sectarian features.

Malaysia needs a wholesale political transformation, but it isn’t ready for one. Six decades after independence, true multiparty democracy is still a long way away.

Chin-Huat Wong is a political scientist with the Penang Institute, a state government think tank.